Questions 1 and 2: Read the following two country profiles to answer the questions Bolivia Country Overview Bolivia is a landlocked country in South America that borders the countries of Argentina, Brazil, Chile, Paraguay, and Peru. It is located in the rugged Andes Mountain with highland plateau and lowland plains of the Amazon basin. Bolivia shares control of Lago Titicaca, the world's highest lake navigable to large vessels, lying at 12,500 feet above sea level. The government system is a republic; the new constitution defines Bolivia as a "Social Unitarian State." The chief of state and head of government is the president. Bolivia has a mixed economic system which includes a variety of private freedom, combined with centralized economic planning and government regulation. In addition, Bolivia is a member of the Andean Community (ANCOM). Location: South America Capital City: La Paz (-4 GMT) Chief of State: President Juan Evo Morales Ayma Head of Govt.: President Juan Evo Morales Ayma Currency: Bolivian boliviano (BOB) Major Languages: Spanish (official) 60.7%, Quechua (official) 21.2%, Aymara (official) 14.6%, foreign languages 2.4%, Guarani (official) 0.6%, other native languages 0.4%, Primary Religions: Roman Catholic 76.8%, Evangelical and Pentecostal 8.1%, Protestant 7.9%, other 1.7%, none 5.5% Key Economic Facts Income Level (by per capita GNI): Lower Middle Income Level of Development: Developing GDP growth (annual %):4.26% (2016) GDP per capita: $7,236.09 (2016) Inflation, consumer prices (annual %): 3.63% (2016) Labor force, total: 5,537,286 (2017) Unemployment, total (% of total labor force) (modeled ILO estimate): 3.76% (2017) Imports of goods and services (current US$): $10.83 billion (2016) Exports of goods and services (current US$): $8.31 billion (2016) Rankings Index Rank Corruption Perceptions Index 112 /178 Index of Economic Freedom 173 /180 International Logistics Performance Index (LPI) 138 /160 Inward Foreign Direct Investment Potential Index 89 /139 KOF Index of Globalization 98 /185 Strengths Significant natural resources (gas, oil, zinc, silver, gold, tin, and manganese) Membership of the Andean Community and association with Mercosur Large foreign currency reserves Weaknesses Little economic diversity and reliance on oil and gas Landlocked country Size of the informal sector Insecurity, drug trafficking, and risk of social unrest Mongolia Country Overview Mongolia is a landlocked country located in East and Central Asia bordered by Russia and China. The geography of Mongolia is varied with the Gobi Desert to the south and mountainous regions to the north and west. The government system is a parliamentary; the chief of state is the president, and the head of government is the prime minister. Mongolia is a member of the Asia- Pacific Trade Agreement (APTA). Location: Eastern Asia Capital City: Ulaanbaatar (+8 GMT) Chief of State: President Tsakhiagiin Elbegdorj Head of Govt.: Prime Minister Jargaltulga Erdenebat Curre.

1. Questions 1 and 2: Read the following two country profiles to answer the questions
Bolivia
Country Overview
Bolivia is a landlocked country in South America that borders the countries of Argentina, Brazil,
Chile, Paraguay, and Peru. It is located in the rugged Andes Mountain with highland plateau and
lowland plains of the Amazon basin. Bolivia shares control of Lago Titicaca, the world's highest
lake navigable to large vessels, lying at 12,500 feet above sea level. The government system is a
republic; the new constitution defines Bolivia as a "Social Unitarian State." The chief of state
and head of government is the president. Bolivia has a mixed economic system which includes a
variety of private freedom, combined with centralized economic planning and government
regulation. In addition, Bolivia is a member of the Andean Community (ANCOM).
Location: South America
Capital City: La Paz (-4 GMT)
Chief of State: President Juan Evo Morales Ayma
Head of Govt.: President Juan Evo Morales Ayma
Currency: Bolivian boliviano (BOB)
Major Languages: Spanish (official) 60.7%, Quechua (official) 21.2%, Aymara (official) 14.6%,
foreign languages 2.4%, Guarani (official) 0.6%, other native languages 0.4%,
Primary Religions: Roman Catholic 76.8%, Evangelical and Pentecostal 8.1%, Protestant 7.9%,
other 1.7%, none 5.5%
Key Economic Facts
Income Level (by per capita GNI): Lower Middle Income
Level of Development: Developing
GDP growth (annual %):4.26% (2016)
GDP per capita: $7,236.09 (2016)
Inflation, consumer prices (annual %): 3.63% (2016)
Labor force, total: 5,537,286 (2017)
Unemployment, total (% of total labor force) (modeled ILO estimate): 3.76% (2017)

2. Imports of goods and services (current US$): $10.83 billion (2016)
Exports of goods and services (current US$): $8.31 billion (2016)
Rankings
Index Rank
Corruption Perceptions Index 112 /178
Index of Economic Freedom 173 /180
International Logistics Performance Index (LPI) 138 /160
Inward Foreign Direct Investment Potential Index 89 /139
KOF Index of Globalization 98 /185
Strengths
Significant natural resources (gas, oil, zinc, silver, gold, tin, and manganese)
Membership of the Andean Community and association with Mercosur
Large foreign currency reserves
Weaknesses
Little economic diversity and reliance on oil and gas
Landlocked country
Size of the informal sector
Insecurity, drug trafficking, and risk of social unrest
Mongolia
Country Overview
Mongolia is a landlocked country located in East and Central Asia bordered by Russia and
China. The geography of Mongolia is varied with the Gobi Desert to the south and mountainous
regions to the north and west. The government system is a parliamentary; the chief of state is the
president, and the head of government is the prime minister. Mongolia is a member of the Asia-
Pacific Trade Agreement (APTA).

3. Location: Eastern Asia
Capital City: Ulaanbaatar (+8 GMT)
Chief of State: President Tsakhiagiin Elbegdorj
Head of Govt.: Prime Minister Jargaltulga Erdenebat
Currency: Tughrik (MNT)
Major Languages: Khalkha Mongol 90% (official), Turkic, Russian
Primary Religions: Buddhist 53%, Muslim 3%, Christian 2.2%, Shamanist 2.9%, other 0.4%,
none 38.6%
Key Economic Facts
Income Level (by per capita GNI): Upper Middle Income
Level of Development: Developing
GDP growth (annual %): 0.98% (2016)
GDP per capita: $12,220.39 (2016)
Inflation, consumer prices (annual %): 0.55% (2016)
Labor force, total: 1,360,397 (2017)
Unemployment, total (% of total labor force) (modeled ILO estimate): 6.32% (2017)
Imports of goods and services (current US$): $5.22 billion (2016)
Exports of goods and services (current US$): $5.67 billion (2016)
Rankings
Index Rank
Corruption Perceptions Index 103/178
Index of Economic Freedom 125/180
International Logistics Performance Index (LPI) 108 /160
Inward Foreign Direct Investment Potential Index 71/139

4. KOF Index of Globalization 87/185
Strengths
Exploitation of colossal mineral resources
Weaknesses
Economy vulnerable to commodity price fluctuations
High poverty and unemployment rates
Internal political disputes
Alarming level of corruption
Question 1 [37.5 points]
Use the Benefits-Costs-Risks Analysis to determine the overall attractiveness of the two
countries.
(a) Benefits: Compare the benefits of doing business in Bolivia and Mongolia. In making your
comparison, focus on the size of economies and the likely economic growth potential.
(b) Costs: Compare the costs of doing business in Bolivia and Mongolia. In making your
comparison, focus on corruption and lack of infrastructure.
(c) Risks: Compare the political and economic risks of doing business in Bolivia and Mongolia.
In making your comparison, focus on the potential for social unrests and vulnerability to
commodity price shocks. Also explain what Type each country is.
(d) Overall country attractiveness: Based on your answers in parts (a), (b), and (c), which of
the two countries is most attractive for business? Rank each using the following scale.
1 = highly attractive [large benefits; low costs; low risks]
2 = attractive [large benefits; low costs; moderate-to-high risks]
3 = somewhat attractive [large benefits; low-to-moderate costs; moderate-to-high risks]
4 = not attractive [low benefits; high costs; high risks]